ISIS reportedly produces about 40,000 barrels of oil per day. Even assuming a black market discount of $20 per barrel, it is annually netting ~$300 million. Coalition planes often have targeted both the ISIS oil fields and its tanker trucks. Not surprisingly, with revenues of $1 million a day, ISIS has been able to hire engineers and purchase equipment to repair its facilities and keep the oil flowing. Attempts to disrupt the ISIS transportation network similarly have met with frustration. Coalition rules of engagement avoid civilian vehicles so ISIS has shifted from trucking its own oil to selling at the wellhead to private truckers.

While local Syrian markets consume some of this oil, ISIS also benefits from international sales via the Turkish border and Mediterranean ports. Dr. Norman Bailey of the Center for National Security Studies at Haifa University observed that “oil buyers are readily found in the West and tanker trucks are permitted to reach ports where oil tankers are waiting to load it [and] . . . . this requires ready, willing and able collaborators among the business and financial circles of the West as well as surrounding countries.” Once illicit oil reaches the European market, it blends with other crude and is effectively laundered.

The situation with ISIS oil is reminiscent of Africa’s “blood diamond” trade, which fanned brutality in Sierra Leone and Liberia. The UN defined blood diamonds as those that “originate from areas controlled by forces or factions opposed to legitimate and internationally recognized governments, and are used to fund military action in opposition to those governments.” The resulting Kimberly Process has sought to limit blood diamond commerce through certification of stones’ origins. While the Kimberly Process could serve as a model for curtailing illicit oil – by requiring a chain of title from the wellhead to the refinery – the logistics of credentialing 95 million barrels per day would be challenging.

Rather than trying to regulate “clean” oil, might it be possible to mark the tainted oil? The technology of tracer agents has improved in recent years due to their use in hydraulic fracturing of horizontal oil and gas wells. Such wells have dozens of sections or “frac stages” along their lengths. In order to monitor the relative contributions of different stages of the well bore, engineers may inject tracing agents into each stage. The practical result is that technicians can determine which locations are responsible for the production in the commingled stream.

Why not use similar technology to deploy tracer agents into conflict oil? Imagine a world in which ISIS oil could be tracked throughout the chain of commerce, identifying those complicit in its trade. Even if law enforcement and intelligence agencies already know the responsible parties, trackers could provide them with evidence to support prosecution. The United States also could add their names to its Specially Designated Nationals list, which would prohibit them from doing business with U.S. companies and citizens.

Of course, ISIS isn’t just going to allow the coalition to drop tracer agents into its oil production. A more creative delivery mechanism is needed. Cyrus Sanati recently wrote in Fortune magazine about a plan for the coalition sell its own oil into ISIS territory, with the goal of undercutting ISIS prices and luring the private truckers away from ISIS. He argued that “[a]ll this cheap oil and gasoline would cause energy prices to fall rapidly across the caliphate, effectively destroying the local market for ISIS crude.” What if the coalition executed a variation on Sanati’s plan, selling low-cost oil to local truckers, albeit imbedded with tracking agents? The purpose would not be to alter the overall market, but rather, just sell enough tracer oil to gather evidence against downstream conspirators.

As the world has learned, there is no easy solution when militants capture commodities and the wealth that goes along with them. All that income is usually enough to fortify positions and deploy countermeasures, exactly as ISIS has done in Syria. Perhaps the best approach is multifaceted, striking every component of the commerce stream. Technology, such as tracer agents, could place pressure on individuals and companies outside of the conflict zone who, unlike ISIS, are susceptible to the rule of law.

About the Gaille Energy Blog. The Gaille Energy Blog discusses innovative proposals in the field of energy law, with a new issue being posted each Friday at http://www.gaillelaw.com. Scott Gaille is a Lecturer in Law at the University of Chicago Law School, an Adjunct Professor in Management at Rice University’s Graduate School of Business, and the author of two books on energy law (Shale Energy Development and International Energy Development).